The relationship between current liabilities and current assets is

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The relationship between current liabilities and current assets, also known as the current ratio, is used to evaluate a company's liquidity. A high current ratio indicates that a company has enough current assets to cover its current liabilities, which means it can easily meet short-term obligations. On the other hand, a low current ratio indicates that a company may struggle to meet its short-term financial obligations. Therefore, evaluating the relationship between current liabilities and current assets can help investors and analysts determine a company's ability to repay its debts and meet its financial obligations in the short term.

The Relationship Between Current Liabilities and Current Assets Is